Chronic refractory wounds are generally caused by local tissue defects and necrosis, and they are characterized by delayed wound healing as well as high recurrence, which seriously affects life quality. However, effective therapeutics to treat wounds are currently unavailable. Therapy primarily aims to accelerate generation of granulation tissue and decrease recurrence. The pathogenesis of chronic refractory wounds is closely related to multiple complex signaling pathways and a series of cytokines. Among these signaling pathways, TGF-β/Smad7 axis plays a critical role. Specifically, Smad7 is an antagonist of TGF-β that inhibits activation of TGF-β. Moreover, Smad7 promotes wound healing by regulating cytokines and controlling growth, differentiation and apoptosis of cells, which may be exploited to cure the disease. This review aims to reveal the exact functions and mechanisms of Smad7 in regulation of wound healing.